Bill Summary for H 125 (2019-2020)

Summary date: 

Feb 20 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
House Bill 125 (Public) Filed Wednesday, February 20, 2019
AN ACT TO ENACT THE REVISED UNIFORM ATHLETE AGENTS ACT, AS RECOMMENDED BY THE GENERAL STATUTES COMMISSION.
Intro. by Davis, Hardister, Howard, Reives.

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Bill summary

Repeals GS Chapter 78C, Article 9 (Uniform Athlete Agents Act). Enacts new GS Chapter 78C, Article 10 (Revised Uniform Athlete Agents Act). The new Article contains provisions that are substantively identical to the previous Article, except as indicated below.

Throughout the act, regulations on actions by or toward covered athletes are expanded to include actions by or toward parents or legal guardians of the covered athlete when the covered athlete is a minor. 

Re-defines athlete agent (expands definition to include (1) individuals who, for compensation, procures or attempts to obtain employment for a covered athlete as a professional athlete or member of a professional sports team; (2) individuals not employed and acting exclusively for an educational institution who, for compensation, advise or manage covered athletes on matters relating to their business career; and (3) individuals who do either of the above in anticipation of representing a covered athlete. Does not include licensed professionals offering services customarily provided by the profession, unless those professionals (1) directly or indirectly solicit a covered athlete into an agency contract; (2) for compensation, procure or attempt to obtain employment for the athlete as a professional athlete; or (3) receive compensation for professional services at a different rate from individuals who are not covered athletes. Removes language excluding family members of a covered athlete acting solely on behalf of the athlete). Expands the definition of covered athlete to also include former student athletes.

Defines several new terms, including interscholastic sport (sport played between educational institutions that are not community colleges, colleges, or universities), and recruit or solicit (attempt to influence the choice of an athlete agent by a covered athlete, not including non-compensated advice given in family or coaching situations).

Authorizes the Secretary of State (Secretary) to adopt rules to implement this Article.

Prohibits an individual from acting as an athlete agent before being issued a registration certificate for purposes of accepting a commitment from a covered athlete to enter into an agency contract in the future. Eliminates the provision authorizing a North Carolina attorney to act as an athlete agent without registering.

Expands the requirements for registration as an athlete agent to include (1) the Social Security number, date, place of birth, home address, work and mobile telephone numbers, any means of electronic communication, social media accounts of the applicant, and a list of states in which the applicant is currently registered or licensed as an athlete agent or has applied to be registered or licensed; (2) the mailing address, telephone number, social media accounts, organization form, and nature of business of applicant’s businesses or employers; (3) the name of each athlete who terminated an agency contract or other professional agreement with the applicant, or whose contract was terminated by the applicant, within five years preceding the date of application; (4) information regarding the status of applications for state or federal business, professional, or occupational licenses and status as a defendant or respondent in a civil proceeding, unsatisfied judgments, and bankruptcy petitions within 10 years before the date of application, of specified business associates; (5) the name, date of certification or registration, expiration of certification or registration; date of any denial, suspension, revocation, refusal to renew, withdrawal of, or termination of certification of any certifying professional league or players association, if applicable; and (6) any additional information required by the Secretary of State. Deletes the requirement of the names and addresses of three individual references, and the provision allowing an applicant who has applied for registration or licensure as an athlete agent in another state to submit a copy of that application in lieu of the prescribed application. 

Authorizes the Secretary to consider, in addition to the previously authorized factors, whether an applicant has been refused renewal of registration or licensure as an athlete agent in any state, in determining whether to issue a certificate of registration.

Authorizes the Secretary to, in addition to the previously authorized penalties, limit a registration of an applicant. Deletes the provision requiring the Secretary to provide notice and opportunity for hearing before denying, suspending, revoking, or refusing to renew a certificate of registration or licensure.

Revises the required form of agency contracts to require a statement that the athlete agent is registered in the State and a list of all other states in which the athlete agent is registered as an athlete agent. Revises the text of the required boldface type notice that must be included in an agency contract. Requires an accompanying separate record signed by the covered athlete acknowledging that signing the contract may result in loss of eligibility to participate in the sport as a student athlete. If the covered athlete is a minor, all forms and contracts must be signed by the athlete’s parent or guardian.

Expands requirements to notify the athletic director of an educational institution to include circumstances in which (1) a covered athlete enrolls in an educational institute subsequent to the creation or commitment to the future creation of an agency contract between the covered athlete and the athlete agent (notice required not later than 72 hours after the athlete agent knows or should have known of the enrollment); (2) a relationship exists between the athlete agent and a covered athlete, which was motivated by the intention to recruit or solicit the covered athlete into a future agency contract, or in which the athlete agent previously recruited or solicited the covered athlete (notice required not later than 10 days after the enrollment); (3) a covered athlete is already enrolled in an educational institution or was recently enrolled, and the athlete agent has not yet communicated with the covered athlete, and plans to do so (notice required before attempted communication); (4) the covered athlete initiates contact with the athlete agent (notice required not later than 10 days after the communication or attempted communication); or (5) an athlete agent knows or should have known of a violation of this Article that could render a covered athlete ineligible to engage in an interscholastic or intercollegiate sport (notice required not later than 72 hours after becoming aware, or before the covered athlete’s next scheduled athletic event, whichever occurs first).

Requires educational institutions that become aware of an athlete agent’s violations of this Article to notify the Secretary and any professional league or players association with which the educational institution is aware the athlete agent is licensed or registered.

Deletes the provision waiving an athlete’s attorney-client privilege with respect to records required to be retained by an athlete agent.

Deletes and replaces current section on prohibited conduct. Athlete agents are prohibited from (1) giving materially false or misleading information or making a materially false promise or representation, or furnishing anything of value to a covered athlete or an individual other than the covered athlete, with intent to influence a covered athlete, or encouraging any individual to take the same actions; (2) initiating contact with a covered athlete to recruit or solicit the covered athlete to enter an agency contract in the present or in the future; and (3) intentionally failing to create, retain, or permit inspection of required records; failing to register as required; providing materially false or misleading information in an application for registration or renewal of registration; pre- or post-dating an agency contract; failing to notify a covered athlete before entering into an agency contract that the signing may make the covered athlete ineligible to participate as a student athlete in that sport; or failing to notify a covered athlete before seeking or accepting a commitment letter to enter into an agency contract for a particular sport that may make the covered athlete ineligible to participate as a student athlete in that sport. Violations of (1) and (2) are Class H felonies, and violations of (3) are Class 1 misdemeanors. Further prohibits an athlete agent from entering into an agency contract that does not conform with GS 78C-114 and GS 78C-120, and seeking or accepting from a covered athlete a commitment to enter into an agency contract in the future. 

Authorizes a covered athlete, in addition to the previously authorized educational institution, to bring an action for damages against athlete agents if adversely affected by the agent’s violation of this Article. Violations of the Article are unfair trade or deceptive practices for the purposes of GS Chapter 75. Athlete Agents held liable forfeit rights of payment for anything of benefit or value provided to the covered athlete, and shall refund consideration already paid to the athlete agent. Eliminates the provision authorizing actions against former student athletes by educational institutions.

Increases the limit on authorized civil penalty for a violation to $250,000 (currently $25,000). Directs the Secretary to consider 16 mitigating and aggravating factors in assessing a civil penalty, including the degree and extent of harm to the covered athlete and educational institution, the nature of the violation, willfulness, and fraud.

Includes a severability clause. 

Directs the Revisor of Statutes to print, as annotations to the published General Statutes, all relevant portions of the Official Comments to the Revised Uniform Athlete Agents Act (2015) and the explanatory comments of the drafters of this act as the Revisor deems appropriate. 

Effective December 1, 2019, and applies to acts and omissions occurring on or after that date.

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